A difficult question; should a small business owner, in a service business, open up an additional business selling a product?
I am sure we are all challenged, at least once, with a similar situation. The current service business is surviving; it has not experienced growth in the past year, and the owner said he is trying to grow the business but has has little success. Looking at the books for the past year, the business is providing a “living” for the owner and one employee.
The results of my visit with the owner were as follows:
- There is not an ongoing marketing plan for the current business
- Most of the current business is repeat clientele and a few referrals.
- There was very little excitement in the owners voice when sharing his current business story.
- There was a lot of excitement when describing the potential he felt existed in the new product.
- The goal was to open a second business, selling this product line, while still maintaining his current service business.
- complete a cost and time analysis for starting another business.
- do a staff analysis for both businesses, if they were both operating at the same time
- complete a business and marketing plan (two year) for the new business
- visit and compile date on current businesses that offer the same or similar products as the new business will offer.
- complete a new marketing plan for the existing service business with the goal of increasing profits by 30% within the next 12 months.
- have a family meeting to discuss the implication for the family; will the new business put the family budget at risk?
Based upon the answers to these questions and if both funds and staff are available, to grow the existing business and to adequately staff and finance the new business, then go for it.
My hope is that the new business will rejuvenate the first business; I also got a promise to work closely with his mentor to be accountable for the business and marketing plans for both businesses. Sometimes,with correct planning, stepping out of the box
will yield positive results.
To succeed in life in today’s world, you must have the will and tenacity to finish the job.